ECB Survey Shows Euro Zone 3-Year Inflation View Eased to 2.9% as April CPI Hit 3%
Updated
Updated · Reuters · Jun 1
ECB Survey Shows Euro Zone 3-Year Inflation View Eased to 2.9% as April CPI Hit 3%
13 articles · Updated · Reuters · Jun 1
One-year euro zone inflation expectations held at 4.0% in April, while the three-year view eased to 2.9% from 3.0% and the five-year view stayed at 2.4%, the ECB said.
Those readings suggest households did not meaningfully revise medium-term price expectations even after headline inflation jumped to 3% in April, easing fears that expectations were drifting away from the ECB's 2% target.
The survey feeds into the ECB's June 11 meeting, but it is unlikely to alter expectations for a widely signaled 25-basis-point rate hike from the current 2% deposit rate.
Consumers also turned gloomier on the economy, expecting a 2.2% contraction over the next year and trimming income growth expectations to 0.8% from 1.2%, a backdrop that could limit bets on rapid follow-up tightening.
Fresh euro zone inflation data is due Tuesday, with economists expecting 3.2%; Reuters polling suggests price growth could keep accelerating and peak nearer 4% in coming months.
Consumer and expert inflation forecasts are diverging. Which path will the European Central Bank choose for its policy?
Can the ECB fight war-fueled inflation without pushing the fragile Eurozone economy into a painful recession?